If Labor Supply of Unskilled Workers Is Perfectly Inelastic, Then

question 7

Multiple Choice

If labor supply of unskilled workers is perfectly inelastic, then

• A) firms face an increasing marginal cost of hiring unskilled labor.
• B) firms face a horizontal value of marginal product of employment curve.
• C) the labor supply curve of unskilled workers is horizontal at the market-clearing wage.
• D) the labor supply curve of unskilled workers is vertical at the total number of unskilled workers in the market.
• E) workers will supply more hours of labor to the market when wages increase.

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Definitions:

Dividends Payable

A liability on the balance sheet representing the amount of dividends that a company owes to its shareholders but has not yet paid.

Stock Splits

An action by a company to divide its existing shares into multiple shares to boost the liquidity of the shares.

Retained Earnings

The portion of a company's profits that is held or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay off debt.

Dividend-Related Liability

A financial obligation arising when a company declares dividends payable to shareholders, to be settled on the dividend payment date.